USD/CHF tests 0.97 post-ADP, remains in daily range
The USD/CHF pair showed a modest reaction to the ADP private employment report from the United States and gained 15 pips to test the 0.97 handle once again. As of writing, the pair was trading at 0.9701, up 0.45% on the day.
Today's data released by the Automatic Data Processing Research Institue showed that the private sector employment increased by 178,000 in July, missing the market expectation of 185,000. However, June's reading was revised up to 191,000 from 158,000 and it offset any potential negative impacts of July's data on the greenback. After a short fluctuation, the US Dollar Index returned to the levels where it was moving before the data release. At the moment, the index is at 92.92, virtually flat on the day.
- US: Private sector employment increased by 178,000 jobs from June to July - ADP
In the meantime, major equity indexes in the U.S. are set to start the day strongly on Wednesday. Apple announced better than expected revenue, iPhone sales, and EPS figures for the second quarter of 2017 yesterday after the closing bell and is likely to push the tech-heavy Nasdaq composite to new highs today. As a traditional safe haven, CHF could have a tough time finding demand in case the risk appetite remains dominant in the session, as the economic calendar won't be offering any data that could potentially affect the price action in the remainder of the session.
Technical outlook
The RSI on the H4 chart continues to move towards the 70 handle, suggesting that the pair has more room on the upside before it becomes technically overbought. A daily close above 0.9700 (psychological level/Jul. 14 high) could allow the pair to extend its gains towards 0.9740 (Jun. 26 high) and 0.9770 (100-DMA). On the downside, supports could be seen at 0.9645 (daily low), 0.9590 (Jul. 17 low) and 0.9490 (Jul. 26 low).
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